Credit card users put branding ahead of rates

Brand and reputation outweigh almost all other considerations when customers choose credit cards, according to readers of Fool.co.uk.

The survey by Fool.co.uk dispels the commonly-held perception that credit cards are a commodity. Eight out of ten credit card users say the brand and reputation of credit cards are more important than other factors such as balance transfer fees and long balance-transfer periods.

However, the importance of other issues rises to the fore when similar credit cards are compared. Measured against four leading credit cards, Barclaycard, with a typical APR of 14.9% and a 13-month 0% balance transfer period, fared best - nine out of ten customers said they are satisfied. It is a hair’s breadth ahead of Egg, MBNA and Halifax, which have slightly more expensive borrowing costs and marginally higher balance-transfer fees.

David Kuo, Head of Personal Finance at Fool.co.uk says, “According to Fool.co.uk readers, Barclaycard is still on top some 41 years after launching the first credit card in the UK. Today, the industry boasts more than 66 million credit cards, and accounts for almost £150 billion of transactions a year.

“However, as one of the major credit card providers in the UK, Barclaycard must bear some responsibility for ensuring that the industry remains competitive by continually improving its offering to customers.

“It must stop talking of introducing annual fees for low-usage customers, which sends out the wrong message to sensible consumers. It should not frighten customers into using their credit cards to simply avoid paying annual fees.

“For now, Barclaycard can afford to feel smug. But it is only a whisker away from being overtaken by a chasing pack of cards with equally valuable brands given that we are never more than a mouse-click from switching.”